NEW YORK, March 10, 2011 /PRNewswire/ -- Commodity markets continued to increase in February despite mixed global macroeconomic conditions. Prices were supported by inflationary concerns and strong emerging markets demand amidst tight inventory levels for raw materials.
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Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management, said, "Uncertainty in the Middle East and North Africa remains high. The focus of the ever-changing situation shifted from Tunisia and Egypt to Libya. As a result, concerns that unrest would spread to oil-producing countries were materialized. As February came to a close, the situation in Libya remained uncertain and speculation continued as to how events there would unfold. This led to a sudden spike in oil prices late in the month, which weighed on equity markets, at least temporarily. It was not surprising to see a 'flight to safety,' with precious metals performing quite strongly."
Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "Fundamentals for many key commodities continue to improve due to a combination of strong demand and a variety of supply shocks, which have exacerbated already tight inventories and have helped to shrink limited excess capacity. Amidst this backdrop, we believe commodities are poised to serve investor portfolios well. We also believe investors will continue to benefit from the diversification benefits commodities provide."
The Dow Jones-UBS Commodity Index Total Return rose 1.32% in February. Overall, 11 of the 19 index constituents increased in value. Despite negative performance in January, the Precious Metals sector was the strongest group in February, up 9.07% as a result of Silver's stellar performance, gaining 19.97%. Precious metals increased as a result of renewed inflationary concerns. Similar to the previous month, Agriculture continued to do well, rising 0.95%, mostly as a result of Cotton's gains in a tight inventory environment.
The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of their white paper, "How Commodities Can Help Investors Face the Uncertainty of the Inflation/Deflation Debate", please email [email protected].
About the Credit Suisse Total Commodity Return Strategy
Credit Suisse's Total Commodity Return Strategy has been managed for fourteen years and seeks to outperform the return of a commodities index, such as the Dow Jones–UBS Commodity Index Total Return or the S&P GSCI Total Return Index, using a quantitative commodity research process. Commodity index total returns are achieved through:
- Spot Return: price return on specified commodity futures contracts;
- Roll Yield: impact due to migration of futures positions from near to far contracts; and
- Collateral Yield: return earned on collateral for the futures.
As of February 28, 2011 the team managed approximately USD 9.2 billion in assets globally.
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Important Legal Information
This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change without obligation to update. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not a guide to future performance. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.
Certain information contained in this document constitutes "Forward-Looking Statements" (including observations about markets and industry and regulatory trends as of the original date of this document), which can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "target", "project", "estimate", "intend", "continue" or "believe", or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties beyond our control, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Credit Suisse has no obligation to update any of the forward-looking statements in this document.
Copyright © 2011, CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.
SOURCE Credit Suisse AG
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